Episode 329 - Optimal Education Savings, Withdrawals, and Asset Allocation

The Rational Reminder Podcast

Hosts Ben Felix, Dan Bortolotti, and Mark McGrath delve into the intricacies of the Registered Education Savings Plan (RESP), a tax-advantaged account designed to help Canadian families save for their children's post-secondary education. They explore optimal contribution strategies, debating whether to front-load contributions or maximize government grants over time. The conversation covers the complexities of RESP withdrawals, including the different types of payments and the importance of strategic timing to minimize taxes. They also discuss asset allocation strategies within an RESP, touching on whether a glide path approach makes sense. Dan shares a critical perspective on the RESP system, highlighting its shortcomings in assisting low-income families and offering suggestions for improvement.

Whether you're a parent planning for your child's education or simply interested in financial planning and investment strategies, this episode provides valuable insights into making the most of RESPs.

Key Points From This Episode:

(0:03:00) Overview of the Registered Education Savings Plan (RESP) in Canada. (0:04:33) Discussion on contribution limits and government grants for RESPs. (0:07:15) Explanation of the Canada Learning Bond and provincial grants. (0:10:00) The flexibility and complexities of family RESPs. (0:12:51) Contribution strategies: front-loading vs. maximizing grants. (0:17:54) Optimal RESP withdrawal strategies and timing. (0:28:11) Asset allocation strategies within an RESP, including glide paths. (0:43:45) Dan's critique of the RESP system and suggestions for improvement. (0:55:37) Discussion on the inadequacy of RESP incentives for low-income families. (1:04:26) Positive observations about RESPs and their benefits. (1:09:19) Listener feedback and appreciation for the podcast hosts.

Links From Today’s Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on Apple Podcasts — https://podcasts.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582 Rational Reminder Website — https://rationalreminder.ca/

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/@rationalreminder/

Rational Reminder Email — [e-mail] Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://x.com/MarkMcGrathCFP

Dan Bortolotti on LinkedIn — https://linkedin.com/in/dan-bortolotti-8a482310/